What Are the Legal Risks Involved With An IV Therapy Business?

Nurses, emergency medical technicians, and other healthcare providers have begun to see that IV therapy can be a helpful and profitable venture. We receive many questions about the legal issues involved with starting and operating an IV therapy business. In this article, we explain some of the many legal risks that need to be considered, some of the laws and regulations that apply, and some of the strategies we’ll review with you.

We can’t make business or medical recommendations here. Nor can we give specific legal answers until an attorney-client relationship is established. We do hope the discussion that follows will help you begin to see how an experienced healthcare law firm can help you understand some of the factors you need to review.

We do get many questions these days about IV (intravenous) hydration therapy – also called IV vitamin therapy. These questions include who can own an IV hydration enterprise – an RN, an LVN, an EMT, or a non-practitioner? Who can manage an IV hydration enterprise? Does a doctor need to supervise the business? What are the corporate practice of medicine laws? Can I use an MSO (managed service organization)?

We’ll start our discussion by explaining how IV hydration works and some of the pros and cons. We’ll then discuss some of the legal risks involved. There will be a second article that focuses on additional legal concerns.

What is IV therapy?

IV therapy is a method for delivering fluids and medications to the human body. IV is short for intravenous which, in turn, means that the products are delivered through the veins. Essentially, an IV drip or injection delivers vitamins, minerals, or medications into a patient’s veins. The purpose of IV therapy is to deliver the products in a way that is faster than taking the products orally. IV therapy allows the vitamins, minerals, and medications to move quickly through the bloodstream.

IV therapies are administered by a healthcare professional, usually a nurse, for a variety of different reasons, from dehydration to medical emergencies. IV therapy can also help address symptoms related to conditions like the cold, the flu, morning sickness, nutrient deficiencies, and hangovers.

Normally, the patient is seated during the therapy session. Usually, a nurse disinfects the injection site and then places a needle into a vein.

“Once the IV is inserted, a manual or electronic pump will deliver the fluid into an IV bag. The nurse will check the pump to ensure the rate of delivery is correct. The fluid drips from the bag through the catheter and enters your body. Once inside your body, the fluid from the IV bag enters the bloodstream.”

What fluids, vitamins, and minerals are inserted through IV therapy?

The products that are in the IV bag depend on the purpose of the therapy. Some of the common products used include:

  • Saline. This solution of water and sodium chloride helps with hydration and is used as a “delivery system for the other IV components.”
  • Dextrose. This product is a type of sugar that IV companies claim is healthy. Its general purpose is to help with a patient’s blood sugar levels.
  • Lactated Ringer’s. This IV product is often used during surgery to treat dehydration.
  • Various vitamins. Vitamin B complex, according to Mobile IV Medics, helps treat metabolism and nerve function issues. Vitamin C aims to help with immune function and other issues.

Other IV products include calcium, magnesium, antioxidants, and antibiotics.

Advocates of IV therapy claim medical services can come to a patient’s home or another convenient location instead of having the patient go to a doctor’s office or a hospital. IV therapy is generally used, according to its advocates, to improve the health of the recipient.

What are the uses of IV therapy?

A few common uses include treating hangovers, recovery after strenuous athletics, supporting the immune system, cold and flu relief, relief of headaches and migraines, and relief of pregnancy symptoms.

What are some of the common considerations when starting an IV hydration business?

Any healthcare provider who is considering starting or who is running an IV hydration business should seek answers to the following questions:

  • Who is prescribing the IV?
  • Who is the clinician?
  • What structure is being used such as a corporation, an LLC, or a professional corporation?
  • What referral regulations must be considered?
  • What marketing rules such as FTC regulations must I know about?
  • What’s in the IV cocktail?

Other considerations we’re ready to review with you that we discussed in our IV legal strategies page include:

  • Is the business legal in my state?
  • Does the cocktail have to be FDA approved?
  • Who can transport it?
  • What state licensing agency can get involved?
  • Where do you find the applicable rules?
  • Will the compensation be considered an illegal kickback?
  • Is there a difference where the service is delivered – at home, through a mobile app, in a medical setting, or at a hospital?
  • What type of contracts between the business and the patient are required?
  • What other business/patient issues need to be reviewed?

There are additional business, insurance (including medical malpractice insurance), and practical considerations to understand.

Which healthcare professionals can administer an IV?

The authority to administer an IV may vary from state to state. According to Registered Nursing, an IV nurse is a:

“Registered nurse who specializes in the administration of medications and fluids through an intravenous (IV) line, central line, or venous access port. They can work as a resource to a hospital by starting lines and training new nurses in obtaining and maintaining IV access. An infusion nurse must be skilled in pharmacology, laboratory tests, and sometimes even telemetry to safely monitor patients throughout infusion therapy.”

Generally, there are education and certification requirements that infusion nurses must meet. A Certified Registered Infusion Nurse has additional education and experience.

IV therapy is generally provided in hospitals – usually in an emergency room setting or as an inpatient. Other possible locations (provided all the legal requirements are met) include urgent care centers, medical spas), IV bars (either fixed or mobile locations), and at the patient’s home (the concierge service comes to the patient’s home) – (provided a qualified healthcare professional administers the treatment).

IV therapy companies tout the following benefits:

  • Convenience. The patient can select the setting.
  • Customization. The IV solution is custom-made for the patient.
  • Absorption into the bloodstream
  • Hydration

Patients should be advised that IV therapy, especially away from a hospital setting, is not covered by insurance. RNs and other health providers who administer the IV need to review possible adverse reactions such as allergies. Some patients may require multiple treatments.

What is the corporate practice of medicine doctrine and how does the doctrine affect IV therapy?

The corporate practice of medicine doctrine is a law that limits who can practice medicine or hire those who do practice medicine. The aim is to ensure that a doctor’s medical judgment is based solely on what is in the best interest of the patient – and not on what is in the financial interest of the stakeholders/investors/owners of the business. In short, the aim of the corporate medical practice doctrine is to separate medical decision-making from business decision-making.

While many physicians operate as a sole proprietorship or as a partnership with other physicians, another option is to form a medical corporation – which may help limit liability, save taxes, and make “control and success of the practice easier, and create other opportunities and risk management benefits.”

“California does not give physicians the option of forming a standard C-Corporation or other common professional corporations such as an S-Corporations or an LLC (Limited Liability Corporation). Physicians who incorporate must create a California professional medical corporation. The medical corporation must be formed pursuant to the Moscone-Knox Professional Corporation Act.”

What Physicians and Investors Must Know About California Medical Corporations

Doctors must comply with California’s Professional Corporation Act. A professional medical corporation provides many advantages over a partnership or sole proprietorship.

Generally, the majority owners of IV therapy practices must be licensed doctors of medicine (MD) or licensed osteopathic medicine doctors (DO). Permissible non-majority owners include registered nurses, among other types of healthcare providers. Non-physicians cannot hire doctors as either an employee or an independent contractor.

Non-physicians such as registered nurses generally should be able to manage the non-medical side of an IV therapy practice by using a Management Services Organization (MSO).

Another benefit of using an MSO is that an MSO can generally be used to help protect against Stark Law, Anti-Kickback Statute (AKS), and state fee-splitting laws. Our skilled healthcare lawyers will explain the requirements and benefits of using an MSO to manage the business side of an IV therapy practice. As we discussed in our corporate practice of medical article in more detail:

“MSOs can be used for ‘a conventional medical practice, a medical spa, an aesthetic medicine practice, integrative medicine, functional medicine, concierge medicine … or even a psychology practice or behavioral medicine group.’”

We’ll discuss many other legal issues involved with an IV therapy practice – starting with a discussion of when and how a physician must be involved with the IV therapy – and the role of the registered nurse– in part two of our discussion.

IV therapy is a new business model that is attracting many healthcare providers throughout the country. There are many legal issues that must be reviewed starting with who can own an IV practice and the relationship between the practice of medicine and the business practice sides of an IV therapy practice. Failure to comply with federal and state laws along with state and local medical board oversight can cause your business to close before the business starts, criminal and civil penalties, loss of a professional license, and other consequences.

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Doctors, pharmacists, registered nurses, EMTs, and anyone considered starting or running an IV therapy practice should contact Cohen Healthcare Law Group, PC to review the federal and state compliance issues. Our experienced healthcare attorneys advise healthcare providers about healthcare compliance laws and regulations.

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